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By a margin of 92-17, the Illinois House voted in favor of House
Speaker Michael Madigan's (D-Chicago) proposal to create a two-tiered pension system limiting retirement the state's modest retirement benefit packages for new state hires. In addition to capping the portion of salaries that can be counted toward
pension benefits at $106,800, the bill bumps up the minimum retirement age to collect full benefits to 67. Supporters contend it could save the state billions over the coming decades. The measure now heads to the state Senate.

UPDATE (9:10 pm): With astonishing speed, the General Assembly has passed a substantial overhaul of the state's public employee pension system. Following passage in the House, the Senate approved the same bill tonight 48-6, with three present votes. AFSCME Council 31 calls the package "the first step in an all-out offensive to drastically reduce public employee pensions." Chris Wetterich summed up the procedural maneuvering nicely: "Today’s move was textbook Madigan: surprising, swift and brutal."

Will Republicans agree to fundamental tax reform in lieu of this big economic "reform?" And what is in the bill to prevent future legislative leaders from skipping future pension payments, the primary source of Illinois' pension debt? We will follow-up on the story tomorrow.

UPDATE 2 (10:32 pm): Jamey Dunn has written a nice recap of the bill, and the rationale for pushing it quickly, for Illinois Issues. Here are the two key paragraphs:

David Vaught, Gov. Pat Quinn’s budget director, said he was concerned
that Illinois’ bond rating, which determines the interest rate the
state will have to pay on borrowed money, could be downgraded again
when the state seeks to borrow about $1 billion in April to fund the
capital construction plan.

Vaught said pension reform could help
Illinois avoid a slip in its rating because it would show investors
that the state is taking steps to address its structural deficit and
“the straitjacket of skyrocketing pension costs.” The state’s total
pension liability is $126.5, billion, $77.8 billion of which is
unfunded.

UPDATE 3 (7:50 am): Gov. Pat Quinn is expected to sign off
on the pension revamp almost immediately. Once he does, the Quinn administration will try to
market construction bonds to get a portion of the state's capital
program going.